On February 19, 2016, 27 states, the United States Chamber of Commerce, and over 150 different organizations and entities (the "Petitioners") filed their joint Opening Brief on Core Legal Issues (the "Opening Brief"), related to their petitions for review of the Environmental Protection Agency's (EPA's) final agency action titled "Carbon Pollution Emission Guidelines for Existing Stationary Sources: Electric Utility Generating Units," or as it is commonly referenced, the "Clean Power Plan" (the "Final Rule").
According to the comprehensive and detailed Opening Brief, the Final Rule relies on "an obscure provision of the Clean Air Act," to institute "an 'aggressive transformation' of the mix of electricity generation in nearly every [s]tate by systematically 'decarboniz[ing]' power generation and ushering in a new 'clean energy' economy." Opening Brief, at 3. EPA has taken this bold step, even though Congress has never adopted any legislation specifically intended to achieve this result. Id.
The Opening Brief explains that this "audacious assertion of authority" is inappropriate, as Clean Air Act Section 111, upon which EPA bases its actions, does not support the sweeping changes, which the Final Rule purports to institute. Id. at 4. The Petitioners explain, inter alia:
[T]he [Final Rule's] [emission] reduction requirements can be met only by shutting down hundreds of coal-fired plants, limiting the use of others, and requiring the construction and operation of other types of facilities preferred by the EPA – a directive EPA euphemistically calls "generation shifting."
EPA's legal theory is at odds with the plain language of Section 111 and certainly is not "clearly authorized by that provision. Section 111(d) authorizes EPA to establish 'procedure[s]' under which States set standards of performance for any existing source," i.e., standards that are "appl[icable] ... to a particular source" within a regulated "source category." Those standards must reflect the "application of the best system of emission reduction" to that "source," i.e., to a "building, structure, facility, or installation." In other words, EPA may seek to reduce emissions only through measures that can be implemented by individual facilities.
The [Final] Rule is further barred by the fact that coal-fired electric generating units are already regulated under section 112 of the Clean Air Act.
Id. at 4-5 (internal citations omitted).
The Petitioners explain that such a "breathtaking expansion of the agency's authority" would transform Section 111(d) "from a limited provision into the most powerful part of the Clean Air Act, making the agency a central planner for every single industry that emits carbon dioxide. Congress did not intend and could not have imagined such a result when it passed the provision more than 45 years ago." Id. at 6. They claim this approach would upend many aspects of the nation's economy, as well as long-standing approaches to the provision of energy across the country, including a state's traditional role as utility regulator within its own borders. Id. at 41. Thus, they assert, the "[Final] Rule must be vacated." Id. at 6.
The Petitioners' legal arguments come on the heels of the Supreme Court's heavily discussed February 9, 2016, decision to grant the applications of numerous opponents of the Final Rule to order an immediate stay of implementation of the Final Rule, pending a final judicial ruling on its legality.
According to the Supreme Court's decision, the Final Rule:
is stayed pending disposition of the applicants' petitions for review in the United States Court of Appeals for the District of Columbia Circuit and disposition of the applicants petition for a writ of certiorari, if such writ is sought. If a writ of certiorari is sought and the [c]ourt denies the petition, this order shall terminate automatically. If the Court grants the petition for a writ of certiorari, this order shall terminate when the Court enters its judgment.
In the meantime, the parties shall continue with written briefing of the arguments. The D.C. Circuit will hear oral arguments on the Final Rule on June 2, 2016, per the case's expedited schedule.
BakerHostetler is counsel of record for the State of Oklahoma and Oklahoma Department of Environmental Quality in this matter. BakerHostetler is also advising clients in both the private and public sectors on the far-reaching impacts of this rule.
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